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New Boral chief Mike Kane has begun a review of all corporate costs bar the factory floor and sales teams as “very difficult” trading conditions persist, particularly in Australia.

Mr Kane, in the top job of Australia’s largest construction materials company for one month, said cutting costs was his main priority.

“We need the factory people to make products and the sales teams out there but the administrative overhead and the management structure bet­ween that group [of people] and my office is being reviewed in detail,” the chief executive said in his first address to shareholders. “Any company in a cyclical and commoditised industry needs to be circumspect about overheads it carries.”

Mr Kane said it was too early to say how many jobs may be cut. The review will be completed next month, when he is scheduled to present the immediate and longer term strategy for the group to the board. He said Boral had the right strategy in place with the potential to deliver “significant benefits” but more work was needed.

A Boral spokesman reiterated the group would not be forced to raise equity this financial year despite speculation prior to Mr Kane’s appointment.

Boral downgraded market expectations for its earnings twice between April and June, citing poor construction activity, especially in housing, and bad weather.

Mr Kane gave a slightly better than expected market update. US housing starts rose by 28 per cent year on year to an annualised rate of 786,000 on a seasonally adjusted basis. “I absolutely believe the recovery in the US is well under way,” he said.

Based on first quarter trading, Boral expects core net profit after tax in the first half 2013 financial year to be comparable with that achieved in the second half of the 2012 financial year. The second half of the 2013 financial year “should see” the benefit of improving market conditions in the US and in the Australian market, he added.

Cutting out more costs as part of ongoing “improvement” programs should also underpin a solid second half result, he said.

Boral shares fell more than 4 per cent immediately following the announcement on Thursday but recovered to close down only 2¢ lower to $3.57 a share while the broader market also closed lower.

Citigroup analyst Guy Bunce questioned whether any improvement in the second half of the financial year would be enough to meet consensus expectations of a second half net profit after tax of around $101 million.

Mr Kane joined Boral in February 2010 and was president of Boral USA before being appointed group chief executive in October. Boral’s USA operations now have a break-even point of 950,000 housing starts, down from 1.2 million starts as a result of cost cutting initiatives and halving its brick production footprint.